Fiscal Year 2005 Annual Incentive Plan Summary

EX-10.19 7 c89126exv10w19.htm FISCAL YEAR 2005 ANNUAL INCENTIVE PLAN SUMMARY exv10w19

EXHIBIT 10.19

Fiscal Year 2005 Annual Incentive Plan Summary
(September 1, 2004 through August 31, 2005 Performance Period)

General:

•

The Fiscal Year 2005 Annual Incentive Plan (“Plan”) will cover the performance period September 1, 2004 through August 31, 2005 (“Performance Period”)

Any payout, as determined by the Board People and Compensation Committee (“Committee”), is made in November 2005

•		Eligibility includes regular employees who do not participate in a local sales or manufacturing annual incentive plan

•		Funding of the Plan is determined by the Company’s attainment of certain financial goals and the Committee’s determination that such attainment satisfies certain subjective performance criteria as determined by the Committee. In addition, regardless of the attainment of any one or more of the Plan’s financial goals, the Committee, in its sole discretion, shall determine whether the incentive pool should be funded and the amount of such funding, if any

•		A Target Annual Incentive Opportunity, expressed as a percentage of base pay, is established for each participant with respect to the Performance Period

•		Various performance levels are approved by the Committee with a payout level associated with each level of performance:


		Potential Payout
		As a Percent of Target Annual
Performance Level		Incentive Opportunity
Threshold		35%
Budget		100%
Outstanding		200%

•

The cost at the Budget level of performance for the Performance Period is as follows:


Officers	$	3.3	M
Management	$	37.7	M
Non-Management	$	9.0	M

TOTAL	$	50.0	M

Financial Goals:

•

The Committee approves Threshold, Budget and Outstanding levels of performance for the Performance Period relating to:


		Ø Sales Growth		10% weighting
		Ø Earnings Per Share		50% weighting
		Ø Cash Flow		40% weighting

•		Sales Growth, Earnings Per Share and Cash Flow are determined in accordance with the “Definition of Performance Metrics”

•		Following the end of the Performance Period, the Committee evaluates Company performance for the Performance Period relative to the financial goals

The Committee may consider subjective criteria in determining whether or not any financial goal has been attained and the amount of incentive pool funding with respect to any financial goal

Process: Funding of Incentive Pool and Payout of Awards:

•

A Target incentive award pool is calculated, equal to the sum of base salaries of all Plan participants at the end of the Performance Year multiplied by their respective Target Annual Incentive Opportunities

•

After the end of the Performance Period, the Committee determines the actual funding of the incentive pool for the Plan based upon the Company’s performance for the Performance Period, measured against the Plan’s financial goals and other subjective performance factors

The Committee may, in its judgment, consider subjective factors in determining to what extent, if any, the incentive pool will be funded

•

The amount of money available for awards (i.e. the funding of the incentive pool) is determined by multiplying the value of the Target incentive award pool by the percentage of overall Company performance achieved, as determined by the Committee

Special considerations regarding attainment of financial goals and funding of incentive pool:

•

The incentive pool will be funded at no less than 20% of Budget level funding in the event Monsanto pays dividends with respect to each of its financial quarters ending during the Performance Year

•		In the event Monsanto does pay dividends with respect to each of the Company’s fiscal quarters ending during the Performance Period, but the Company does not attain the Threshold level of performance with respect to the Earnings Per Share financial goal (considering the financial goal metrics for Earnings Per Share and other subjective performance factors), the incentive pool may not fund at greater than 20% of Budget level funding

•		If the Company exceeds the Outstanding level of performance with respect to any one or more financial goals, the incentive pool may be funded above the Outstanding level

•

Individual awards are determined based on team and individual performance

Ø		People managers: 50% of award based on development of people, team and personal development (including diversity); 50% based on business results

Ø		Non-managers: 75% of award based on business results; 25% on personal development

•

The payment and amount of any award are subject to the sole discretion of the Committee or its delegate

Events Affecting Payout of Individual Performance Year Incentives:

•

If an employee commences employment during the Performance Period, he/she is eligible for an award reflecting actual months of participation to the nearest whole month

•

If a participant’s Target Annual Incentive Opportunity changes during the Performance Period, he/she is eligible for an award reflecting the Target Annual Incentive Opportunity on the last day of the Performance Period

•

If a participant’s pay changes during the Performance Period, any incentive award received is based on base pay on the last day of the Performance Period

•

If a participant transfers within the Company, his/her award will come from the unit in which he/she is working on the last day of the Performance Period, but performance for the entire Performance Period will be considered

•

A participant who:

voluntarily resigns may be considered for an award only if the resignation occurs after the end of the Performance Period

Ø		involuntarily separates without cause, is eligible for an award reflecting participation to the nearest whole month if he/she has already worked at least three months in the Performance Period

Ø		retires, dies, or becomes permanently disabled, is eligible for an award reflecting actual participation to the nearest whole month provided that he/she worked at least three months during the Performance Period. Retirement is defined as termination at or after age 50.

Ø		incurs a termination of employment for cause, forfeits all rights to any award

•

Any award would be paid in November 2005